Referring to the items listed below, place the appropriate letter next to the corresponding description.
Cash flows from operating activities
Noncash charges / expenses
Noncash credits / revenues
Statement of cash flows
Generally include the cash effects of transactions and other events tha
Replaced by the statement of cash flows.
Reports the flow of cash into and out of a business in a given period.
Current assets minus current liabilities.
Include obtaining resources from owners and providing them with a r
obtaining resources from creditors and repaying or otherwise setling t
Shows significant financing and investing activities that did not affect
A way of determining cash flows from operating activities that starts w
expenses and revenues that do not affect cash.
Include lending money and collecting the principal on those loans; acq
securities of other companies; and acquiring or disposing of property,
Deducts from cash sales only those operating expenses that consumed
Revenues and gains included in arriving at net income that do not pro
Expenses and losses that are added back to net income because they d
Net cash provided by operating activities divided by the average num
Net cash provided by operating activities divided by net sales.
Cash generated by the regular operations of a business; usually compu
the effects of other current assets and current liabilities on cash flows
in arriving at net income, minus noncash revenues included, less certa
are included in the total proceeds received from sale of fixed assets.
Statement of changes in financial position
Cash flow margin ratio
Cash flow per share of common stock outstanding
ons and other events that enter into the determination of
iness in a given period.
providing them with a return on their investment and
ing or otherwise setling the debt.
vities that did not affect cash.
ing activities that starts with net income and adjusts for
cipal on those loans; acquiring and selling or disposing of
or disposing of property, plant, and equipment.
expenses that consumed cash.
t income that do not provide cash.
et income because they do not actually use cash of the the
ded by the average number of shares of common stock
ded by net sales.
a business; usually computed as net income plus or minus
t liabilities on cash flows, plus noncash expenses deducted
nues included, less certain gains and plus any losses that
om sale of fixed assets.
Common-size percentages are often used to compare the statements of companies of unequal size. The condensed inc
below. Enter in the spaces provided the amounts expressed in common-size percentages.
Company A and Company B
Income Statements for Year Ended December 31, 2007
Cost of goods sold
Total operating expenses
After expressing the amounts of the income statements in common-size percentages, examine them and name the com
mpanies of unequal size. The condensed income statements of Companies A and B are given
pany A and Company B
ts for Year Ended December 31, 2007
rcentages, examine them and name the company that operated more efficiently.
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